Strathcona Resources Non-Independent Director Acquires 571% More Stock

Those following along with Strathcona Resources Ltd. (TSE:SCR) will no doubt be intrigued by the recent purchase of shares by Andrew Kim, Non-Independent Director of the company, who spent a stonking CA$6.5m on stock at an average price of CA$29.00. That purchase boosted their holding by 571%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.

Check out our latest analysis for Strathcona Resources

The Last 12 Months Of Insider Transactions At Strathcona Resources

In fact, the recent purchase by Andrew Kim was the biggest purchase of Strathcona Resources shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of CA$27.10. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Strathcona Resources insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.3% of Strathcona Resources shares, worth about CA$19m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Strathcona Resources Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Strathcona Resources we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Strathcona Resources is showing 2 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

Of course Strathcona Resources may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.